Bill seeks to extend California’s cap-and-trade system to 2030

Updated 10:50 pm, Monday, July 10, 2017

Photo: Rich Pedroncelli, Associated Press

Image 1of/2

Caption

Close

Image 1 of 2

FILE - This Friday Sept. 22, 2006, file photo, shows an oil refinery at sunset in Rodeo, Calif. California's cap-and-trade law, which puts a cap and a price on carbon emissions, expires in 2020, but Gov. Jerry Brown say he's still hopeful it will be extended, after he failed to convince lawmakers to extend it in tandem with the just-passed state budget. (AP Photo/Rich Pedroncelli, File) less

FILE - This Friday Sept. 22, 2006, file photo, shows an oil refinery at sunset in Rodeo, Calif. California's cap-and-trade law, which puts a cap and a price on carbon emissions, expires in 2020, but Gov. Jerry ... more

Photo: Rich Pedroncelli, Associated Press

Image 2 of 2

California Gov. Jerry Brown said he will need Republican's help to renew California's cap-and-trade program, while speaking at the California Chamber of Commerce 92nd Annual Sacramento Host Breakfast, Thursday, June 1, 2017, in Sacramento, Calif. less

California Gov. Jerry Brown said he will need Republican's help to renew California's cap-and-trade program, while speaking at the California Chamber of Commerce 92nd Annual Sacramento Host Breakfast, Thursday, ... more

Photo: Rich Pedroncelli, Associated Press

Bill seeks to extend California’s cap-and-trade system to 2030

1 / 2

Back to Gallery

California’s greenhouse gas cap-and-trade system — one of the main weapons in the state’s fight against global warming — would be extended to 2030, under legislation that Gov. Jerry Brown and legislative leaders unveiled Monday evening.

At the same time, the legislation would prevent local air districts in California from imposing their own limits on greenhouse gas emissions from sources already covered under cap and trade.

That would effectively kill long-running efforts by Bay Area air quality regulators to place hard limits on emissions of carbon dioxide and other heat-trapping gases from local oil refineries.

The legislation, coming in the form of two bills published online at 6:30 p.m. Monday, would continue cap and trade, but with several tweaks.

Assembly Bill 398 would establish a ceiling for the price of allowances — essentially, permits to emit one metric ton of greenhouse gases. The current cap-and-trade system sets a floor for prices but does not have a firm upper limit, although it does contain measures to keep prices from spiraling out of control. So far, prices have typically hovered at or near the floor.

The bill would also ratchet back the use of offsets — projects like reforestation efforts that help reduce greenhouse gases — and require that 50 percent of such projects take place in California or have a direct environmental impact on the state.

It would also prioritize the state programs that could receive funding from the money the state collects by selling allowances. Efforts to control toxic air pollution from mobile or stationary sources — such as factories and refineries — would be first in line, followed by low-carbon transportation projects and sustainable agriculture programs.

RELATED VIDEO: California steps up efforts to combat climate change

Jerry Brown. He's the governor of California and has made fighting climate change a major theme of his time in office. On Thursday, he took the extraordinary step of announcing that his state would host a global climate summit. Brown announced the Climate Action Summit in a video that played at a festival in Hamburg, Germany.

Media: WochIt Media

The second bill, AB617, would require stricter air pollution monitoring around industrial facilities and tougher penalties for violating pollution regulations.

The bills — which arrive after months of intense, closed-door negotiations — represent Brown’s latest attempt to solidify the future of cap and trade and cement his legacy on climate change. And they will almost certainly face a fight.

The ban on emission limits from local air districts gives the oil industry and its legislative allies something they wanted, ensuring that Sacramento will remain the state’s primary source of global warming regulations. But environmentalists, some of whom have always been leery of cap and trade, consider the move a sellout and say it will continue to give refineries a license to pollute their communities.

At the same time, Brown and legislators working with the governor’s office have tried to address some of the social justice concerns that those environmentalists have raised. Hence the emphasis placed on tighter air pollution monitoring and enforcement.

Related Stories

The cap-and-trade system sets an annual limit on greenhouse gas emissions across California’s economy and forces companies to buy an allowance for each metric ton of gases they emit. The number of allowances available each year matches the annual limit, and both shrink year by year, cutting emissions. The companies, meanwhile, can buy the allowances from each other or through quarterly auctions run by the state.

The system has been plagued by uncertainty over whether the legislation that authorized it — California’s landmark 2006 climate law, AB32 — specifically authorized it to continue past the year 2020.

In addition, cap and trade has faced a long-running legal challenge from the California Chamber of Commerce, which argued that the allowances represented an illegal tax. Although the state Supreme Court recently declined to consider the chamber’s lawsuit, Brown has been pushing for an extension bill that could win the approval of two thirds of the Legislature, the level of support needed to approve a new tax.

Latest from the SFGATE homepage:

Click below for the top news from around the Bay Area and beyond. Sign up for our newsletters to be the first to learn about breaking news and more. Go to 'Sign In' and 'Manage Profile' at the top of the page.